Container Fleet Smashes 34M TEU Record as Fleet Growth Accelerates
Growth in the container segment of the shipping industry has been making headlines for a long time, but it just smashed through a record. Surpassing the 34 million TEU mark, trade group BIMCO says the growth has accelerated and is reshaping the sector.
According to BIMCO’s calculations, global container fleet capacity was just 8,000 TEU below the 34 million TEU mark as of the beginning of September. It reported the milestone would be reached after only a few of the 46 ships (totalling 286,000 TEU) scheduled for September delivery enter into service.
Indeed, by AlphaLiner’s figures, the industry is there. In its ranking of the Top 100 carriers, AlphaLiner sets the fully cellular capacty is at 34.2 million with 6,822 fully cellular vessels representing 412 million dwt in active service. (Total capacity according to AlphaLiner for all types of vessels is already over 34.6 million TEU.)
"When the world’s shipyards deliver just a few more container ships, the global fleet capacity will for the first time reach 34 million TEU,” said Niels Rasmussen, Chief Shipping Analyst at BIMCO. “At that time, the fleet will have grown by 10 million TEU - or 42 percent - in just five and a half years.”
BIMCO highlights that the latest addition of 10 million TEU, achieved in just five and a half years, is also a record. In comparison, it says it took the industry 10 and a half years to go from 14 to 24 million TEU.
“The growth we have seen reflects a combination of record-high new ship deliveries and remarkably low ship recycling activity,” said Rasmussen. “Less than 300,000 TEU have been recycled over the last five and a half years. The last time recycling activity was this low during the same time frame was between early 2004 and mid-2009, when the fleet was only one-third of its current size.”
Due to the low rate of recycling, BIMCO calculates that the share of older ships has increased considerably. Nearly 2,000 ships contributing more than 5 million TEU of capacity are now 20 years old or older. Within the next five years, it says these ships will have reached or exceeded the historical average recycling age of 25 years and therefore represent the natural recycling potential for the coming years.
“Depending on recycling activity, the fleet could add another 10 million TEU and reach 44 million TEU within five years. The order book already includes more than 14 million TEU scheduled for delivery by the end of 2030,” said Rasmussen. “Even if every ship currently aged 20 years or more is recycled by then, supply growth will remain high, particularly if normal Suez Canal routings resume and release the capacity now absorbed by diversions around the Cape of Good Hope.”
As the growth has accelerated, it has also changed the composition of the sector. Ships larger than 12,000 TEU have contributed two-thirds of the 10 million TEU added since early 2021. As a result, the largest ships’ share of fleet capacity has risen from 30 to 40 percent while the average containership size has increased by 14 percent. Where once 18,000 TEU ships were considered massive, capacity has increased by a third, with the largest ships having ticked in just above 24,000 TEU, and it takes a capacity of 20,000 TEU to be in today’s ultra-large category.
The fleet’s ownership structure has also changed significantly over the past five and a half years, says BIMCO. Liner operators account for 85 percent of the added 10 million TEU and now control 65 percent of fleet capacity, up from 57 percent in early 2021.
Based on AlphaLiner’s league tables, the top eight carriers are each above a capacity of 1 million TEU, and collectively are nearly a capacity of 28 million TEU. Only one of the top eight carriers is below a capacity of 2 million TEU.
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The most dramatic growth is MSC Mediterranean Shipping Company. MSC is at nearly 7.4 million TEU, making it more than 50 percent larger than the second-largest, Maersk. Reports have highlighted the continued growth based on the orderbook for the top carriers, noting that unless Maersk moves to add capacity as early as next year, it could fall to number three or four as CMA CGM, COSCO, and Hapag-Lloyd all continue to add capacity.
The sector’s leading executives have openly expressed concerns about near-term overcapacity. However, it is not stopping them from ordering even more containerships.
